Who owns branded slot machines?

8 November 2018

By John Grochowski

QUESTION: When a slot machine is made by two different manufacturers, how does that work? There were Elvis slots by IGT and the Elvis slots by WMS. There were a couple of different Price Is Right slots, and I'm sure there have been others.

What happens? Does one manufacturer have to pay the other one? Can they both make the games at the same time?

ANSWER: What happens is that the original license with the intellectual property owner has expired, and that owner then has the right to license the theme out again.

IGT had Price Is Right slots in the early 1990s under a license from the owners of the TV game show. That license expired, and after a number of years passed, the show owners negotiated a new license with WMS.

The same thing happened with Elvis slots. The original license expired, and those who own the rights to Elvis' name and image negotiated a new license with a different company.

When licenses are negotiated, they are for a limited number of years, and the contract may have options to renew the license. The licenses also are exclusive, so no, it's not allowed for two manufacturers to produce slots with the same licensed theme at the same time.

There have been a number of such games, including Yahtzee, with a version by Mikohn in the 1990s followed by a more recent game by WMS. WMS also picked up on The Game of Life after that board game favorite had an earlier run as an Atronic slot.

The key is that the property being licensed have multiple elements that can easily be translated into slot play and bonus events. One gamemaker may decide it's had its run with the Price Is Right's Plinko, Cliff Hanger and other games, but after a few years pass, another manufacturer sees more potential slot fun.


QUESTION: Can you expand a little on the idea that casinos make money from winners?

A friend of mine said that, and another friend said, "Then they'd really make money if players always won, right?" The discussion stopped there, but I knew the first friend had something to say if only he could get it out.

ANSWER: The way I usually choose to put it is, "the casino makes money by paying winners less than true odds."

All the house winnings come from lost bets, but they'd be completely offset by player winnings if bets were paid at true odds.

Pretend you're at a double-zero roulette wheel. There are 38 numbers, so true odds against winning a single-number bet are 37-1.

Now imagine there are 38 players, and each puts a $1 chip on a different number. When the wheel stops there is one winner and 37 losers. The house collects $37 on the losing bets.

The one winner is paid at 35-1 odds, so the house pays out $35 while taking in $37 and has a $2 profit on the spin.

But if the house paid the winning bet at the true odds, then it would be paying out $37 while taking in $37.

All the house revenue has come from losers, but the house has a profit only because it has paid the winner at less than true odds.

The same principal is at work in all casino games. If you lose your bet, it doesn't matter to you what odds are being paid to winners. You've lost your bet.

But your losses wouldn't guarantee the house a profit if winners were being paid at true odds.